12 Govs Face N5.3tn Debt Burden As Tenure Ends In 2027, 2028

Twelve state governors whose tenures will end in 2027 and early 2028 are set to leave behind a combined debt burden of about N5.3tn, according to an analysis of data from the Debt Management Office.

The affected governors are Umaru Fintiri of Adamawa, Mai Mala Buni of Yobe, Abdullahi Sule of Nasarawa, AbdulRahman AbdulRazaq of Kwara, Dapo Abiodun of Ogun, Inuwa Yahaya of Gombe, Bala Mohammed of Bauchi, Babajide Sanwo-Olu of Lagos, Babagana Zulum of Borno, Seyi Makinde of Oyo, Hope Uzodimma of Imo and Douye Diri of Bayelsa.

The 12 states had accumulated domestic debts of N2.16tn as of the first quarter of 2026, while their external obligations stood at about $2.33bn based on the latest available state-level data.

Most of the governors are expected to complete their second terms in 2027, while Uzodimma and Diri will remain in office until January 15 and February 14, 2028, respectively.

However, the debt records show varying trends across the states, with some governors reducing domestic obligations while increasing external debts, and others recording reductions in both categories.

Lagos leads domestic, external debt figures

Lagos has the largest domestic debt among the 12 states, with N1.205tn owed as of the first quarter of 2026.

The figure represents more than half of the combined N2.16tn domestic debt of the affected states.

The state also recorded the highest external debt, with outstanding foreign obligations of $1.174bn in the DMO’s 2025 external debt profile.

Nasarawa had the lowest domestic debt at N27.15bn, while Yobe recorded the lowest external obligation at $46.67m.

The combined debt burden could rise further if any of the affected states undertake fresh borrowing before the governors leave office or if updated debt figures reveal additional liabilities.

Mixed debt records

In Adamawa, Fintiri reduced domestic debt from N95.22bn when he assumed office to N64.7bn, although external debt increased from $100.614m to $124m.

Yobe’s domestic debt rose from N27.47bn to N98.60bn under Buni, while its external obligations increased from $26.911m to $46.67m.

Sule reduced Nasarawa’s domestic debt from N89.95bn to N27.15bn, while the state’s external debt stood at $60.82m.

In Imo, Uzodimma reduced domestic debt from N164.436bn to N81.65bn but increased external obligations from $64.762m to $117.08m.

Kwara’s domestic debt fell marginally from N59.58bn to N56.92bn under AbdulRazaq, while its external debt increased from $47.961m to $64.159m.

Abiodun increased Ogun’s domestic debt from N97.050bn to N200.748bn and external debt from $102.154m to $217m.

Gombe’s Yahaya reduced domestic debt from N76.895bn to N65.17bn but increased external obligations from $36.960m to $88.7m.

Bauchi’s domestic debt rose from N93.320bn to N154.45bn under Bala Mohammed, while external debt increased from $133.705m to $220.6m.

In Borno, Zulum increased domestic debt from N78.259bn to N88.44bn and external debt from $21.313m to $69.9m.

Bayelsa recorded a significant reduction, with Diri cutting domestic debt from N147.930bn to N50.17bn and external obligations from $59.551m to $55.5m.

Makinde also reduced Oyo’s domestic debt from N94.140bn to N69.8bn and external debt from $136.531m to $87.5m.

In Lagos, Sanwo-Olu increased domestic debt from N542.231bn to N1.205tn but reduced external obligations from $1.421bn to $1.174bn.

Experts defend productive borrowing

A Professor of Development Economics at Nnamdi Azikiwe University, Uche Nwogwugwu, said states could reduce their debt burden by investing borrowed funds in productive sectors capable of generating revenue.

Nwogwugwu identified poor policy continuity as one of the challenges affecting the effective use of borrowed funds, noting that successive administrations often abandon existing strategies instead of building on previous investments.

He argued that borrowing was not necessarily harmful if the funds were invested in projects capable of generating returns and improving citizens’ welfare.

Similarly, a Professor of International Economics, Jonathan Aremu, said borrowing could support economic development when channelled into productive investments.

He explained that infrastructure such as roads that improve the movement of agricultural produce to markets could justify borrowing because of its potential economic returns.

However, he warned that loans used for projects that generate little or no economic value could become dead-weight debt and place additional pressure on the economy.

An emerging markets analyst, Ike Ibeabuchi, meanwhile, cautioned states against excessive reliance on external borrowing.

He noted that the depreciation of the naira had increased the local-currency cost of servicing dollar-denominated obligations.

Ibeabuchi said states should consider domestic financing options or asset sales where appropriate rather than accumulating excessive foreign debt.

The analysts stressed that the key issue was not borrowing itself but whether borrowed funds were deployed in ways capable of generating sustainable economic returns and improving the living standards of residents.